Mortgage Servicing Rights

3 Months Ended

Mar. 31, 2025

The unpaid principal balance of the Company’s mortgage servicing rights portfolio totaled $418.6 million at March 31, 2025 compared to $425.8 million at December 31, 2024. Of these total balances, the unpaid principal balance of loans serviced for Federal National Mortgage Association (“Fannie Mae”) at March 31, 2025 and December 31, 2024 were $416.5 million and $423.7 million, respectively. The unpaid principal balance of loans serviced for other financial institutions totaled $2.1 million at both March 31, 2025 and December 31, 2024. Loans serviced for Fannie Mae and others are not included in the Company’s financial statements as they are not assets of the Company.

A summary of the change in the balance of mortgage servicing assets during the periods indicated were as follows (in thousands):


	Three Months Ended March 31,
	2025		2024
Beginning balance, at fair value	$	4,769	$	4,632
Servicing rights that result from transfers and sale of financial assets	18		45
Changes in fair value:
Due to changes in model inputs or assumptions and other(1)	(99)		(65)

Ending balance, at fair value	$	4,688	$	4,612

(1) Represents changes due to collection/realization of expected cash flows and curtailments.

The key economic assumptions used in determining the fair value of mortgage servicing rights at the dates indicated are as follows:


	March 31, 2025		December 31, 2024
Prepayment speed (Public Securities Association “PSA” model)	125	%	125	%
Weighted-average life	10.8 years		10.6 years
Weighted average discount rate	10.0	%	10.0	%

The amount of contractually specified servicing, late and ancillary fees earned on mortgage servicing rights are included in

mortgage servicing income on the Condensed Consolidated Statements of Income and totaled $269 thousand and $282 thousand for the three months ended March 31, 2025 and 2024, respectively.